iPod mini with lost/damaged firmware... and cannot be restored.

My iPod mini is messed-up, but I've figured some things out. I get the exclamation folder but only when it is unplugged. It still shows up as an iPod mini in iTunes and I can still load it with files. I tried to restore it using the updater and it says it has the latest update, 1.4.1. But when I try to use it on its own I get the exlamation point folder, which means a software/firmware problem. I tried simply restoring it, but that didn't help. I erased it using the disk utility and then restored it but again works fine as a recognized iPod in iTunes but shows me the folder when unplugged. My guess is that the firware that runs the actual playing of the files has been removed or corrupted, but the part of the iPod that remembers which version was last updated in order for iTunes to know know whether or not to update is still intact.

My bet is that all I need to do is re-install the firmware but it won't let me because it says the iPod is up to date. I even tried re-installing iTunes, and removing the iPodDriver.kext file so that the iPod would not have a history on my computer but for some reason the brilliant updater wanted to install the wrong update; it was for a really old firewire iPod.

I know that something is missing because my iPod, as a drive, when viewed in a windows does not have those "contact" and "calendar" folders anymore.

I could just wait for a new update but that will probably be months away.

Any adivice would be appreciated.

iPod Mini 4GB Mac OS X (10.4.7)